Nasdaq Looks to Shake Up M&A Space with Acquisition of Chi-X Canada

A potential deal between Nasdaq and Chi-X Canada could help fortify an existing link between American and Canadian markets.

Nasdaq Inc. is currently engaged in talks to acquire Chi-X Canada, a comprehensive multi-asset trading marketplace, for a possible sum of $100 million, according to a recent Reuters report.

Chi-X Canada is owned by a group of major financial institutions and operates market centers in Australia, Canada and Japan. Chi-X Canada is a high-performance alternative trading system (ATS) marketplace for the trading of TSX and is the largest ATS system in Canada.

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A potential acquisition of Chi-X Canada by Nasdaq, regardless of its sum, would help alter the playing field in Canada, directly competing with TMX Group Ltd., one of Toronto’s paramount stock exchanges. While no concrete deal has reached fruition at this juncture, it is possible that a final sum or particulars could be hammered out within the next couple weeks – conversely, any potential acquisition could fall apart.

Nasdaq has recently embarked on an industry-wide expansion of its services suite and capabilities, as well as being active in the M&A space during the past year. Most recently, Nasdaq opted to look into expanding its blockchain ambitions abroad, which saw the planning of securities-focused applications in Estonia.

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A potential deal between Nasdaq and Chi-X Canada could help fortify an existing link between American and Canadian markets. Presently, a number of companies are already listed and traded on stock exchanges in both countries, a trend that would likely continue should an acquisition come to pass.

Chi-X Canada oversees stock markets that handled roughly 13.0% of Canadian equity volume during the Q3 2015. While this figure pales in comparison to the TMX’s approximately 70% trading share, a potential transaction would give Nasdaq a sizable chunk of a $1.7-trillion market, the world’s eighth largest by market capitalization.

A possible dark horse suitor for Chi-X Global could also be the Singapore Exchange (SGX), which is expected to draw interest. Currently, Nomura Holdings Inc. is the controlling shareholder of Chi- X, active in running stock markets across both Australia and Japan.

Other key investors also include JPMorgan Chase & Co., Bank of America Corp., UBS Group AG and Goldman Sachs Group Inc., according to recent regulatory filings.

Finance Magnates will have more on this situation as it develops.

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